According to the latest CPI report from the Ministry of Labor, gas prices in July fell 2.2% from June and 9.5% from the previous year. Why prices at pumps can continue to slip in the coming months.
The Fed will maintain stable fees amid Trump’s pressure and inflation risk
Despite President Donald Trump’s push for cuts from tariffs, the Fed only stayed at 4.25% to 4.5%.
The Labor Bureau’s latest consumer price index report shows that headline inflation has been stable in July, but tariffs appear to be colliding with imports such as furniture, audio and video products.
What is one of the sources of relief for consumers? Price at the pump. The latest CPI report shows prices in July fell 2.2% from June and 9.5% from the previous year. According to the AAA, the national average for regular unleaded gallons on August 12 was $3.14.
Prices could continue to slip in the coming months as the weather cools and oil production rises.
“Gas prices are lower than a year ago. That really continues this year, giving consumers a certain degree of confidence because they feel a bit wealthy when there is inflation elsewhere,” said Matt Smith, an oil analyst at commodity data company Kpler. “They should definitely provide and provide a little rest for the future.”
Gas prices for 2025 “Stable”
What is the best way to explain gas prices so far this year? “Stable” especially when compared to recent years with dramatic swings like 2022, according to AAA spokesman Aixa Diaz.
“It’s certainly good news for drivers,” Diaz said.
Increased production from oil producers helped to maintain price stability. It is Brent crude, the global benchmark for oil prices, which has been traded primarily between about $60 and $70 in recent months.
According to Smith, a group of oil producers known as OPEC+ has shown no signs of slowing after hiking production to regain market share and announced plans to boost production again in September. Meanwhile, US crude oil production has hit record highs this year at over 13 billion barrels per day, with small oil producers like Brazil and Guyana increasing production as well.
“We should be looking at gasoline prices as there’s a lot of supply coming into the market to outweigh demand,” Smith said.
How low is the gas price?
If oil production remains rising, gas prices could continue to fall in the coming months. The U.S. Energy Information Administration expects Brent crude oil prices to fall from an average of $71 per barrel in July to a $58 per barrel in the last three months of the year.
Prices at pumps could also be seen as relief as the weather cools and refineries switch from summer blends to cheaper winter blends.
“We are totally hoping that this drop will go below $3 per gallon, starting from the $3.15 that is currently available,” Smith said. “Perhaps in October. From there we were able to start paying for $2.50.”
However, there is a threat that can drive higher prices. For example, hurricane season peaks in September, increasing the risk of damage to US refineries near the Gulf Coast. Geopolitical tensions can also affect prices.
“If we see (President Donald) Trump having more trouble trying to punish Russia and stop a country like India buying crude countries, there’s a chance that oil prices will be gathered,” Smith said. “It’s the biggest wildcard for the oil market and therefore the price of gasoline.”
